Climate Change Regulations, Policy, and Market Opportunities

There are several strategies of reducing, or mitigating carbon and other GHG emissions.

The first and most basic of which is conservation – if we don’t use the energy in the first place, we don’t need to be concerned with what emissions it was responsible for. Agricultural energy audits are helpful to see the areas capable of the biggest improvements.

Second are emission offsets; an offset is a greenhouse gas reduction made by a non-regulated entity, which is purchased by a regulated entity.

The third strategy of reducing GHG emissions is a regulation imposed to restrict the quantity of emissions on certain parties; this regulation can be in the form of a tax or cap and trade program. Markets exist to trade both voluntary- and mandatory-based compliance credits.

Aside from voluntary and compliance-based markets, other market opportunities exist to give value to reduced emissions, including utility purchase of green energy (both electricity and gas). The Cow Power Program in Vermont is a good example of this process in the U.S. However, with all market options available to trade emission credits, there are costs and potential risks involved that are important to be educated about.

An opportunity exists for animal agriculture to benefit from GHG cap and trade programs, since regulated entities will be looking for carbon offset credits to purchase, and this will drive up the value of the offsets. Credits could be more valuable in the future with legislation to regulate certain sectors – they will look to agriculture as one of the voluntary sources from which to be able to offset those emissions.

Educator Materials

If you would like to use the video, slides, or factsheet for educational programs, please visit the curriculum page for download links for this and other climate change topics.

Examples of Voluntary and Compliance Markets

No endorsement is intended by listing here. These are listed purely to provide examples of different types of markets.

To find more resources on this and related topics, visit the animalagclimatechange.org resource finder.

Acknowledgements

Author: Jennifer Pronto, Cornell University

This page was developed as part of a project "Animal Agriculture and Climate Change" an extension facilitation project to increase capacity for ag professionals. It was funded by USDA-NIFA under award # 2011-67003-30206.